When presenting the Medium-Term Budget Policy Statement on 22 October 2014 South Africa’s Finance Minister gave a warning that, with decreasing tax collections this year, further revenue raising measures will be required in the budget for 2015.
The revenue raising measures will aim to limit as far as possible any adverse effects on growth and job creation, according to the Finance Minister. Although South Africa’s economy had been expected to grow by 2.7 percent in 2014, the forecast has recently been reduced to 1.4 percent, partly owing to the weak global economic climate. Tax revenue is therefore expected to fall below budget in the 2014/15 fiscal year, to ZAR956bn (USD86.9bn) from the previous target of ZAR962.8bn. In response to this situation the Finance Minister stated that the Government will be looking to reduce the budget deficit from 4.1 percent in the current year to 2.5 percent over the next three years.
Proposals will be introduced in the 2015 Budget to generate additional revenue worth at least ZAR27bn over the next two years (ZAR12bn in 2015/16 and ZAR15bn in 2016/17), and this would be followed by measures worth a further ZAR17bn in 2017/18.
